Some people are seriously money-savvy—but a few of us get low-balance alerts and wonderexactlywhere our money went.So it's no surprise that whenLearnVestanalyzed the profiles of more than 100,000 users,it found theirtop financial goal is to budget.Yet while 32 percent of the financial platform's users want to budget,LearnVest says 60 percent of people don't have one—despite its advantages.
"When you have a budget you can actually stick to,it can be an incredibly powerful tool—one that both gives you a clear path to reach your goals and provides a simple framework for how much you can spend each week on all of the fun stuff," LearnVest founder Alexa von Tobel toldGlamour."In other words,it's a system that lets you know you're making smart decisions with every dollar you spend."
If you're ready to begin budgeting but don't where to start,we've gathered von Tobel's top tips to help you manage your money—and stick to whatever plan you set in place.
Ask yourself where you want to be in a year.
One of the best things about creating—and sticking to!—a budget is that it can help you crush yourfinancial goals.But you can't hit your targets if you don't know what they are.So before you get down to the nitty-gritty of creating a budget,"don't forget to step back and assess your financial goals from a 360-degree perspective," says von Tobel."What do you want to accomplish in the next year?Or the next five years?Do you have an emergency fund and are youon track for retirement?How about the right insurance in place to protect yourself?We believe in progress,not perfection—so seize the opportunity the new year provides to get organized and take it from there!"
__Look at the whole pie—not just a slice.__
When you first start to budget,it's likely you don't know exactly where you money goes—and finding out how much you spend (and waste) can be a painful process.But when you work to establish a budget,"you really need to rip off the Band-Aid and make sure you're working with all of your numbers," says von Tobel.To make sure you've got a complete picture of your cash,accounts,and bills,von Tobel suggests asking questions such as,"How much actually hits your bank each month,after taxes?What are your recurring fixed expenses?What do I want to contribute to each of my goals?"
And don't forget to account for non-monthly expenses,von Tobel cautions,that can topple your financial goals if you don't plan for them in advance."These are things you can anticipate but they're irregular—think: car registration fees,holiday gifts,wedding gifts,and more," she says."If you can work those into your budget upfront,you'll be even more prepared for your financial life."
Stick to a single budget.
You might be tempted to created multiple budget to meet myriad goals,but von Tobel says its best to have one budget that shows a snapshot of everything you're spending and working toward."It's one comprehensive budget that accounts for your regular fixed expenses,your goals,your non-monthly expenses—things like haircuts or holiday gifts—and leaves you with one number to spend on everything else," she describes."When it comes to your financial life,the fewer things you have to keep an eye on,the easier it will be to actually make progress."
Keep track of your progress.
Once you've set up your budget,the best way to stick to it is to watch your progress throughout the month.Apps such as LearnVest andMintlink to your financial accounts and offer easy-to-process graphs that show just where you stand on each budget line on any given day."That way,you'll have a picture of your financial life all in one spot and can easily see how you're doing," says von Tobel.If you don't want a digital reminder of your budget,consider asking a friend or trusted financial planner to keep you accountable,von Tobel suggests.
Do you have a budget?Or would you like to create one for this year?What does budgeting help you accomplish?